Jail for family who used 'slaves' to run £7m pirate DVD empire producing 350,000 fakes a week

Khalid Sheikh was jailed for four years for running Britain's biggest DVD piracy scam

A family who made £7million from Britain's biggest fake DVD scam were jailed for a total of 16 years yesterday.

Khalid Sheikh, 53, and his two sons Rafi, 26, and Sami, 28, used dozens of Chinese illegal immigrants as 'slaves' to produce millions of counterfeit copies of blockbuster films at a rate of up to 350,000 discs a week or one every two seconds.

The hits, such as Ice Age 2, The Da Vinci Code and Iron Man, were then touted in pubs and on street corners for as little as £3 - some even before their big-screen debut.

The Sheikhs also churned out copies of hardcore porn films.

Despite their multi-million pound turnover, the family shared a council house and claimed thousands of pounds a year in housing and disability benefit.

The two sons wore designer suits, bought sports cars and flew first class, yet shared a small bedroom. They also made numerous trips to lap-dancing clubs.

For three years, the family produced the fake DVDs at a phenomenal rate in a series of cramped 'factories' in rented industrial units or terraced houses across London.

These were staffed by 'largely illegal Chinese immigrants', some of whom paid up to £20,000 to be smuggled into the UK to earn money to send back to China.

John Hardy QC told Southwark Crown Court in London: 'They were housed in factories, residential premises acquired on short-term lets where they worked round-the-clock in conditions of virtual slavery.'

He said the aim was to 'flood London, the South East of England and beyond with pirate DVDs'.

But to do this the family first needed a legitimate front company to provide a 'veneer of legitimacy and respectability'.

So Khalid Sheikh, who was born in Pakistan, invested £70,000 to start Samrana Ltd in 2003, selling blank DVDs and plastic cases. It was initially run from a shop in Walthamstow, North East London, with Sami and Rafi as directors, but it quickly 'changed from a cottage sideline into a major, organised, criminal industry'.

The family was so successful that in April 2005 they were able to buy a £658,000 warehouse in Harlow, Essex.

They also imported a £300,000 state-of-the-art press from Hong Kong to ensure that the quality of their DVDs was as close as possible to the real thing.

Mr Hardy said: 'At first it may seem this was something of a Robin Hood-type of activity - the works of major production studios, often in Hollywood, were being distributed cheaply for about £3 each in relatively good quality copies to members of the public who might not otherwise be able to afford them.' But the reality was far different.

'The losers ... are not only the major motion picture houses, as well as smaller film-makers such as the producers of Wallace and Gromit, but also - to name but four groups - shopkeepers, cinemas, the slave labour force and the law-abiding public at large'. The court heard that raids three years ago not only found equipment, large numbers of DVDs and a six-figure fortune in cash, but that the Sheikhs were claiming housing benefit.

From left, Rafi Sheikh, 26, and his brother Sami, 28, were both jailed for six years

The father was also claiming disability benefit for a heart problem that he claimed prevented him from walking more than a few steps, despite regularly jetting off to the Middle East and China.

A police source said: 'The two boys acted and behaved like young executive entrepreneurs.

'They wore designer suits, bought a Porsche and Range Rover Vogue and acted like cheeky cockney wide boys. They used their charm and good-looks to great effect on the jury, but they couldn't hide their true colours.

'Their father tried to pretend he was just the book-keeper but he was at the heart of this as much as the boys.

Xin Li, 34, was sentenced to two years and three months. Officers found £23,000 from the operation in his bedroom

'We don't know what they did with all the money, but they had accounts in Pakistan, Hong Kong, China and the Middle East plus property in Dubai.'

All three, from Chingford in Essex, were found guilty of conspiracy to
acquire criminal property between March 2003 and June 2006, following
an 11-week trial which ended earlier this month.

The two sons
were also convicted of conspiracy to contravene copyright and
conspiracy to contravene the Trade Marks Act. Judge Martin Beddoe
jailed them each for six years and their father for four years.

Chinese
immigrant Xim Li, 34, earlier admitted having £23,000 criminal cash in
his room. Judge Beddoe jailed him for two years and three months. He
acted as a middleman between the Sheikhs and the Chinese workforce.

Outside
court, Detective Sergeant Russell Day, of the Metropolitan Police's
film piracy unit, said: 'Film piracy is not a victimless crime and it
is crucial that the public ask themselves if they want to play a part
in the exploitation of vulnerable people by buying illegal DVDs.'

A confiscation hearing, which will try to track down the money, will be held later in the year.